Energy ETF: Bollinger's Bet

01/30/2004 12:00 am EST


John Bollinger

President and Founder, Bollinger Capital Management

John Bollinger may be best known for the technical models that bear his name, but it is the combination of his technical expertise with his common-sense fundamental approach that truly sets him apart from the crowd. Here's his latest on energy.

"It doesn't seem that anybody believes that inflation is a real risk here. Perhaps they have forgotten that commodity prices are rising without respite. Energy prices are climbing, despite the fact that everybody expected them to be lower in the wake of the war. The energy market is one of the most interesting of the all of the markets at present, simply because it is not doing what it is supposed to be doing. Everyone expected energy prices to be lower after the war, but they didn't fall, in the same way that stocks bucked the seasonal downtrend in October. When these breached patterns happen they spin off important information. Energy stocks remain attractive and can be bought on pullbacks. iShares Dow Jones US Energy (IYE ASE) is an interesting play for those of you who don't want to pick stocks. It just overcame resistance at $45, ran to $51. This exchange traded fund can now be bought on weakness."

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